Warning from Wal-Mart

Wal-Mart Predicts Slim Dec. Sales Gain

(AP) Wal-Mart Stores Inc. issued a sobering warning for the holiday shopping season Thursday, predicting its December same-store sales gain would be no better than 1 percent.

The news, coupled with Wal-Mart's expected announcement that it suffered its first same-store decline in more than 10 years during November, came as the nation's retailers reported an overall mixed sales performance for the month. Same-store sales reflect business at stores open at least a year and are the industry standard for measuring a retailer's strength.

Wal-Mart has struggled in recent months on a mix of problems, including the fact that its lower-income customers were hurt by soaring gas prices. But the company's lackluster sales have persisted even as the cost of gas eased, an indication that shoppers are turning away from merchandise like apparel, and sticking with basics like food and consumer products.

"This is pretty discouraging," said Ken Perkins, president of RetailMetrics LLC, a research company in Swampscott, Mass. But he added that Wal-Mart's weak sales will not be a harbinger of a broad based weakness across the retail sector."

"But he added that Wal-Mart's weak sales will not be a harbinger of a broad based weakness across the retail sector."

No there will just be many holes, so that the entire spectrum will look like a moth-eaten sweater.

In EconoDay's report on Personal Consumption from today:

"Equities should be relieved that the odds of a recession have just about disappeared and that the soft landing is intact."

Alert the Fed! Soft landing achieved! MISSION ACCOMPLISHED. EconoDay and their new brilliant "analyst" say so! WHAT A BUY SIDE SHILL.

Peter Morici, professor at the University of Maryland School of Business and former Chief Economist at the U.S. International Trade Commission, chimes in:

----->«Personal income up, good news for stocks«

Today, the Commerce Department reported in October personal income increased $49.3 billion or 0.4 percent, disposable personal income increased $33.1 billion or 0.3 percent, and personal consumption expenditures increased $16.9 billion or 0.2 percent.

The price index for personal consumption expenditures, including food and energy, fell 0.2 percent in October, and was up 1.5 percent from October 2005.

The Federal Reserve closely watches the price index for personal consumption expenditures, less food and energy. This core price index increased 0.2 percent in October, as it did in September. In October, the index was up 2.4 percent from October 2005.

(...)

Inflation remains stubbornly above the Federal Reserve target range of 1 to 2 percent, despite flagging growth in the second and third quarters. The Federal Reserve is not likely to risk additional inflation to shore up the economy by lowering interest rates

Chairman Ben Bernanke will want to make sure inflation is safely boxed before stimulating the economy, even if that risks a recession.

Also, the savings picture improved. Although consumers continued to spend more than they earn, the gap narrowed for the third month in a row. The saving rate—personal savings as a percentage of personal disposable income—was minus 1.7, 1.3, 0.7 and 0.6 percent in July, August, September, and October.

With housing prices falling and household wealth shrinking, savings should continue to improve. Home purchases are no longer viewed as a favorable short-term speculative investment, and individuals are likely to spend less on new homes and invest more in the stock market.

Overall, falling housing prices and more savings should help the stock market rally continue into the New Year.

Bill,
A founder of goldismoney.info has a friend who regularly takes delivery on silver futures. I have a picture of him loading delivery bars into a bucket loader that is amazing.

He reports this morning that his Dec 06 futures will likely go into default on delivery due to lack of metal.

The post:
"From freind that trades Silver Futures

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Looks like my friend has asked for delivery again of some Silver and here is what he was told... Looks like they may be having a hard time coming up with the metal.. He did not send much but here it is.........

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R. J. O'Brien delivery department _ Glen _tells me they are net short silver and therefore not to expect delivery of my Dec 06 silver futures any time soon."

That metal is up .33 now, having broke over 14.01 (+.46) earlier today.

Default on a metal delivery must be a both a bullish sign and perahps a confirmation of manipulation or price supression, no? Or am I misreading this?

Regards,

Mike
NYC

Lest we've forgotten remember what is in Bernake's wallet!
http://www.slate.com/id/2128743/?nav=tap3

;-)

Lest we've forgotten remember what is in Bernake's wallet!

;-)